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Gold losing its shine as natural gas prices start to push higher but Brent continues to struggle

Gold starts to weaken as natural gas regains lost ground. Brent crude continues to struggle for direction amid a plethora of potential key driving forces.

Gold Source: Bloomberg

​Gold starts to turn lower after latest surge

Gold has enjoyed a period of recovery over the course of November thus far, with the index climbing 10% over a fortnight.

However, we are starting to see some of that momentum wane here, with the declines seen across equity markets yesterday feeding through into sentiment for gold.

It is worthwhile noting the fact that gold has been largely trading in line with risk assets, meaning that this market should continue to perform well if indices rise and the dollar drops. A reversion to the more commonly found trend of dollar strength and equity weakness would likely serve to drive gold lower once again.

With that in mind, much of the sentiment here is driven by risk attitudes elsewhere in financial markets. The recent rebound for gold provided us with a double bottom formation, signalling the potential for further upside upon breaking the $1729 level.

However, the $1808 level represents the next major hurdle to overcome if we are to truly believe this 2022 downtrend is over. Thus far we are seeing momentum turn somewhat, signalling the potential for a move lower here. A move below the 80 threshold on the stochastic would provide us with a sell signal.

Meanwhile, further upside is certainly a possibility, although a break through $1808 would bring greater confidence that bullish sentiment can be sustained.

Gold chart Source: ProRealTime

Brent crude back into support as market struggles for direction

Brent crude has been struggling to establish any conviction of late, with the recovery phase seen in October faltering at the 76.4% Fibonacci resistance level.

However, rather than breaking lower once again, we are seeing price move largely sideways ever since. As things stand, the $91.17 level appears to be restricting any further downside, with a break below that level bringing $87.98 into play. A move below $87.98 or above $98.54 could potentially kick things back into life.

Nonetheless, there are a number of factors which could swing sentiment in one direction or another, and until one comes to the fore it seems we are likely to lack any major impetus for crude.

Crude oil chart Source: ProRealTime

Natural gas turns upwards from trendline support

Natural gas has started to drive upwards once again today, following on from a sharp pullback from $7.261 resistance.

The ability to push through that resistance level would be key here, signalling the end of the bearish trajectory seen over the course of August-October.

As such, further upside looks likely here, although it will take a push through $7.261 to bring greater confidence that the bulls are back in charge.

Natural gas chart Source: ProRealTime

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